The Michigan State House approved the tax plan Thursday afternoon on a 56-53 vote. The plan replaces the Michigan Business Tax (MBT) with the 6 percent corporate tax that Governor Snyder proposed in February. The new tax plan also freezes the current income tax rate at 4.35%, eliminates the Earned Income Tax Credit(EITC) and the film credits. It also eliminates the exemption for pensions based on a sliding scale those above 67 will not pay, 60-66 pay less and under 60 would pay the same income tax rate as others over several different income level caps.
The House bill now moves to the senate where further discussion on the pension tax portion is expected.